Here's why I am buying FTSE 100 actions, no S&P 500 shares

He S&P 500 The index of leading US companies includes some that have had a massive success in recent years, of Nvidia to Apple.

I had Apple's shares several years ago and both IT and NVIDIA are on my shopping list if they are available again in what I think is an attractive assessment.

In recent months, however, I have bought some Ftse 100 Actions but not S&P 500. Here is why.

Buffett in the competition circle

A basic but important consideration is that, as the billionaire investor Warren Buffett, I think I can give myself the best opportunity for success in the stock market by following what I know and understand. Buffett refers to him as a circle of competition.

I understand quite the economy of the United States and invest in some actions in the United States. But in general, I have a better management of what is happening in the United Kingdom, so be better capable of detecting some investment opportunities here.

Carry JD sports fashion (LSE: JD) as an example. When he announced last year that he was taking over the rival of us Hibbett, he was already very familiar with JD, but he had never heard of Hibbett.

Attractive assessments

In fact, JD is one of the 100 FTSE shares that I have been adding to my portfolio lately and I think it is worth other investors who also investigate more.

That may seem surprising. The price of its action in the last five years fell 49%.

Nor is its 1.1% yield even so attractive to an FTSE 100 company.

The average yield in the blue chip index at this time is 3.6%, so the JD one is much closer to the S&P 500 average of 1.2%. While JD may not be a good illustration in this regard, juicy yields in general are also an attraction of many British about US actions for me at this time.

But the key attraction for JD in what is concerned is its valuation. This falling the price of the shares combined with long -term commercial growth means that it is now quoted in a price to profits (p/e) ratio of 13. Eliminating exceptional items (JD is largely investing in the expansion of its network of stores). The valuation seems even cheaper.

That is close to the Average FTSE relationship 100 shares, currently in 15. That is half of the P/E S&P 500 ratio of 30.

I think that means that British actions have much better value, but it could be wrong. If I buy an action that is undervalued, the business can work well, but the valuation gap will not necessarily close (it could even be expanded). Many investors prefer to invest in the United States than in the United Kingdom at this time.

Exchange rate risks

Another point that I consider when buying shares is any exchange rate risk. If I bought an S&P 500 action today, I could see that its price (dollar) grows but ends up losing money when I sell if the exchange rate moves unfavorably.

However, the opposite could also happen, and I could benefit from monetary fluctuations.

In addition to that, although an action like JD is called in Sterling, many of its income are in US dollars from the acquisition of Hibbett and, in fact, other coins. He also obtains internationally, so he has a exchange rate risk in his supply chain.